Monday, July 12, 2010

New York Times Hypes Nonstory on Nonprofits

In putting on its front-page, above the fold, and in the right-hand column, a story of almost 5000 words about contributions to US-based non-profits that focus on Israel (Tax-Exempt Funds Aid Settlements in West Bank), the New York Times sends a clear message to its readers: this is an important, major story and attention must be paid to the significant news we have uncovered.

In fact, in the article by Ethan Bronner, Jim Rutenberg and Mik McIntire, there is no news, no scoops, no revelations, few facts, and plenty of errors and omissions.

Let's start with the omissions. In a story on indirect contributions from Americans to Israeli non-profits, there is not one word about the New Israel Fund, by far the largest and most active American organization funneling American contributions to Israeli non-profits. The NIF raised almost $34 million dollars in 2008, and has given more than $200 million in grants since its inception 30 years ago. The New Israel Fund heavily subsidizes radical Israel-based organizations like Adallah, Breaking the Silence, Gisha, B'Tselem and Machsom Watch. These five organizations, together with many similar groups supported by the New Israel Fund, effectively work to undermine Israel's standing in the world and its ability to defend itself.

Yet among these literally hundreds of organizations funded by the NIF not one is mentioned.The only similar group the Times does mention is Peace Now, though it is termed an "Israeli civil and human rights group," which the paper allows might be "accused of having a blatant political agenda."

Also unmentioned by the paper is that many of the groups funded by the NIF are key sources for New York Times itself, such as Gisha, cited in the paper already seven times this year, most recently on July 5th. (According to a Nexis search, since 2006 the Times has cited Gisha a whopping 25 times.)

As CAMERA has previously documented, the Times has habitually taken a protective attitude towards many of these radical groups and their patron, The New Israel Fund. When the organizations' involvement in the notorious Goldstone Report was widely publicized in Israel in early February, 2010 the Times ignored the exposé for two months before reporting the publicity campaign as an "attack" by an "ultra-Zionist" group against "prominent human rights organizations."

In addition to this, of course, are tax deductible donations to anti-Israel organizations based outside of Israel. The Times does admit this occurs, in another unintentionally revealing paragraph:

The use of charities to promote a foreign policy goal is neither new nor unique — Americans also take tax breaks in giving to pro-Palestinian groups. But the donations to the settler movement stand out because of the centrality of the settlement issue in the current talks and the fact that Washington has consistently refused to allow Israel to spend American government aid in the settlements.

Certainly the Palestinians would agree to "the centrality of the settlement issue in the current talks," but for Israel two other issues are central: Palestinian terrorism and one of its root causes, official Palestinian hate indoctrination. So here, as in the rest of this article, and in so much of its coverage, the Times adopts the Palestinian narrative to the exclusion of the Israeli one.

Similarly, in another paragraph, the Times writes of the Israeli group HaYovel that it:

... is one of many groups in the United States using tax-exempt donations to help Jews establish permanence in the Israeli-occupied territories — effectively obstructing the creation of a Palestinian state, widely seen as a necessary condition for Middle East peace.

It may be axiomatic in some circles, such as the newsrooms and boardrooms of the New York Times, that the "creation of a Palestinian state, [is] widely seen as a necessary condition for Middle East peace." But another widely held view, consistently ignored by the Times, is that ending Palestinian terrorism and incitement to violence is a necessary condition for Middle East peace.

Of course, there are many other specific problems with the article.

Where's the beef

The Times admits, in multiple places in the article, that it actually didn't find any smoking guns that might justify the report's placement or even the decision to publish it. For example, the Times admits that:

The money goes mostly to schools, synagogues, recreation centers and the like, legitimate expenditures under the tax law. But it has also paid for more legally questionable commodities: housing as well as guard dogs, bulletproof vests, rifle scopes and vehicles to secure outposts deep in occupied areas.

Schools, synagogues and recreation centers, of course, would cost far more than a few guard dogs and bulletproof vests. So what the Timeshas found is that most of the money is spent in accord with our tax laws. Where is the story?

The use of charities to promote a foreign policy goal is neither new nor unique — Americans also take tax breaks in giving to pro-Palestinian groups.

Again, then, where is the story?

Most contributions go to large, established settlements close to the boundary with Israel that would very likely be annexed in any peace deal, in exchange for land elsewhere.

So why the front page story?

As the American government seeks to end the four-decade Jewish settlement enterprise and foster a Palestinian state in the West Bank, the American Treasury helps sustain the settlements through tax breaks on donations to support them...

[In the United States] ... the tax code encourages citizens to support nonprofit groups that may diverge from official policy, as long as their missions are educational, religious or charitable.

So why the front page story? Does the Times really not realize the contradition in these two sentences?

The Times’s review of pro-settler groups suggests that most generally live within the rules of the American tax code.

So why the front page story? Because there may be a few that don’t?

Errors and Misstatements

Since the premise of the article is based on a strict reading of US tax laws, it is disconcerting that the Times makes a number of material errors regarding those laws.

For example, the Times claims that:

American tax rules prohibit the use of charitable funds for political purposes at home or abroad.

This is not true. Charitable funds can legally be used for certain political purposes. The League of Women Voters, for example, routinely sponsors debates and candidate nights during the campaign season. This is not a violation of the US tax code, nor is putting out voter guides detailing the candidates’ positions on issues of concern to particular groups or the entire community. Nor are educational issue advertisements published by non-profits a violation of the tax code, as long as they don’t endorse a particular position or candidate.

Interestingly enough, the Times quotes in the story a nonprofit tax law expert, Bruce Hopkins, who is indeed a leading specialist on the subject of nonprofit law. (Full disclosure – CAMERA has in the past gotten paid legal advice in the area of nonprofit law from Mr. Hopkins.)

But the Times perhaps didn’t ask him the right questions, since one of his major works is entitled Charity, Advocacy and the Law, with the subtitle How Nonprofit Organizations Can Use Charitable Dollars to Affect Public Policy – Lawfully. The book outlines in great detail why and how what the Times claims to be illegal is, in fact, perfectly legal.

Another false Times claim is that:

Americans cannot claim deductions for direct donations to foreign charities; tax laws allow deductions for domestic giving on the theory that charities ultimately ease pressure on government spending for social programs.

In fact, the US has tax treaties with many countries, including Israel, that permit exactly this, assuming the money was earned in the foreign country. For example, if a US citizen owns an apartment in Israel and rents it out, the money earned can be used for charitable giving in Israel and that will reduce his adjusted US income and taxes.

The Times was also inaccurate in its claim that:

... Israeli-American relations plunged after Israel announced plans for 1,600 new apartments for Jews in East Jerusalem, which the Palestinians want as their future capital.

As reported in Ha'aretz, the announcement of plans to build the 1600 apartments had been made a year earlier. What was announced during the visit of VP Joe Biden in March was approval of the building plans by the Jerusalem District Planning and Construction Committee, one of many such official bodies that must approve the project before building can commence.

The Times, in charging that certain charities did not accurately describe their activities, also misled readers. For example, in recounting a statement by a spokesman for the group Ateret Cohanim, the Times wrote:

Mr. Hoenig said that Ateret Cohanim bought a couple of buildings years ago, but that mostly it helps arrange purchases by other Jewish investors. That is not mentioned, however, on its American affiliate’s tax returns. Rather, they describe its primary charitable purpose as financing “higher educational institutions in Israel,” as well as children’s camps, help for needy families and security for Jews living in East Jerusalem.

Indeed, it does all those things. It houses yeshiva students and teachers in properties it helps acquire and places kindergartens and study institutes into other buildings, all of which helps its activities qualify as educational or religious for tax purposes.

Provide financial support and other assistance to the Ateret Cohanim institutions and community in Jerusalem, Israel.

This description certainly would not rule out advising what properties its supporters should privately buy, and in any event, if such activities are a small portion of what Ateret Cohanim does, then it would not qualify as sufficiently important to report to the IRS. As the Times should have noticed, the relevant form asks for details of “the exempt purpose achievements for each of the organization’s three largest program services by expenses.” Offering advice to prospective property buyers would hardly seem to qualify.

The bottom line is that the Times put on its front page, above the fold, in the right-hand column, a non-story containing no news, few facts and much misinformation. With the Israeli Prime Minister meeting President Obama that afternoon, and given the chance to bash Israel, how could the Times resist? The answer is they couldn't.